Exam 17: The Conduct of Monetary Policy: Strategy and Tactics

During the years 1979 to 1982, the Federal Reserve's announced policy was monetary targeting. During this time period the Federal Reserve ________.

Which of the following criteria must be satisfied when selecting an intermediate target?

Which of the following is an advantage to monetary targeting?

During the 1960s and early 1970s, the Bank of Canada used ________ as the intermediate target(s), to keep the foreign exchange and domestic bonds markets functioning smoothly.

Which of the following is a potential operating instrument for the central bank?

The rate of inflation tends to remain constant when ________.

What are the disadvantages inflation targeting?

Which of the following is an advantage to inflation targeting?

Which of the following is an advantage to inflation targeting?

The Reserve Bank of New Zealand ________.

Using Taylor's rule, when the equilibrium real overnight rate is 2 percent, there is no output gap, the actual inflation rate is zero, and the target inflation rate is 2 percent, the nominal overnight rate should be ________.

Which of the following is the best description of the monetary policy strategy followed by the European Central Bank (ECB)?

In both New Zealand and Canada, what has happened to the unemployment rate since the countries adopted inflation targeting?

Define the two types of asset-price bubbles and explain why one of these is more is more problematic for the economy.

If the Taylor Principle is not followed and nominal interest rates are increased by less than the increase in the inflation rate, then real interest rates will ________ and monetary policy will be too ________.

Why might a policy of low interest rates encourage excessive risk taking?

During the 1982-1988 period, the Bank of Canada looked at a list of factors in order to design and implement monetary policy. This list included ________.

What are some of the costs of cleaning up after a financial crisis?

Which of the following best explains why the Bank of Canada does not use nominal GDP as an intermediate target?

Which of the following is not a requirement in selecting an intermediate target?